Jeremy Hunt, the culture secretary, today launches an impassioned defence of his decision to abolish the UK Film Council, hitting back at leading actors who have criticised the move.

In an article in the Observer, below, Hunt explains his reasons for axeing the organisation for the first time. The minister says it is "simply not acceptable" to use taxpayers' money to fund an organisation that pays its top eight executives more than £100,000 each. "Stopping money being spent on a film quango is not the same as stopping money being spent on film," he writes. "We should not accept the relative size of the British film industry as a fait accompli. Rather, we must step up our ambitions and make the UK the best country for nurturing and promoting its home-grown creative talent."

Despite his pledge to spend more money on film, Hunt risks setting his department on a collision course with the industry. Last week 55 actors and actresses wrote a letter to the Daily Telegraph defending the Film Council, including Bill Nighy, James McAvoy, Emily Blunt and Kelly Reilly. Others who have spoken out include the director Mike Leigh and Rebecca O'Brien, who has produced nine films directed by Ken Loach.

Now more leading names have come forward to attack Hunt. Christopher Hampton, most famous for the screenplays of Dangerous Liaisons and Atonement, described the decision as a "thrashy response". He said he knew of films that would never have been made without the council.

"I am sure there are things that can be done to improve its efficiency, but to just lop somebody's arm off is not necessarily the best way of improving their tennis. I think discussion would have been better than imposition," said Hampton.

The playwright, screenwriter and director pointed to the French film industry, saying he was impressed by the levels of public and private investment. "People go about their work [in France] reasonably expecting the next film will be made. When a film is made here I always think 'gee, what a miracle'."

In his article, Hunt points to some of the successes of the British film industry, including the Harry Potterand Bondfranchises. But Barbara Broccoli OBE, a board member of UKFC and co-producer of the Bond films, was also critical of the move saying that it would be a "tragedy" to abolish the council. She said it helped attract nearly £1bn in film investment to the UK each year.

The council, founded in 2000, had an annual budget of £15m to invest in British films and employed 75 people.

Hunt insists he is fully committed to the British film industry, arguing that under his plans there will be £3m extra each year from Lottery funding. But the minister says the industry has to be "honest about its failings".

One problem is that film-makers often sell their intellectual property rights in advance for larger productions. "This is exactly what happened with Slumdog Millionaire, which was a creative success for Film Four but a financial success for Fox Searchlight," he says.

Christian Colson, producer of the Oscar-winning film, said Hunt was right that there was a wider problem in the industry. But he argued that Slumdog Millionaire was an example of a film that had made millions for British companies. He also came out to defend the Film Council, arguing that he would expect a handful of people at the top to earn six figures. "It would worry me if funds as large as that were being administered by people who did not have years of industry experience," Colson told the Observer.

The producer said he was shocked that the government had decided to dismantle the Film Council without "any clue" of what would replace it. Officials have just launched a discussion with the industry about how money will be distributed in the future.

Gail Egan, executive producer on British successes such as Vera Drake and Happy-Go-Lucky, agreed with colleagues that it would have been nice to "debate" the closure before it was announced.

But not everyone supports the Film Council. Chris Atkins, the director and producer, has hit out at the quango saying "no one" could do a worse job than it had. "They act like they work for Miramax when they are public servants. They would come and sit at the negotiating table and behave like hard-nosed movie executives – yet they are there to serve the industry, not control it," he said. Atkins said he was amazed to find himself in total agreement with a Conservative minister.